EXHIBIT 10.2
GROW BIZ INTERNATIONAL, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
March 22, 2000
TO: Xxxx X. Xxxxxx (the "OPTIONEE")
As the new Chief Executive Officer of Grow Biz International, Inc., a
Minnesota corporation (the "COMPANY"), you are hereby granted an option (the
"OPTION"), pursuant to a resolution of the Board of Directors of the Company
adopted on March 22, 2000.
The Option entitles you to purchase up to 600,000 shares of Common
Stock (the "STOCK") of the Company at a price of $5.00 per share, which was in
excess of the sales price of the Stock as reported on the NASDAQ SmallCap Market
as of the time of the approval of the grant of this Option and as of the close
of business on the date immediately prior to the date of the grant of this
Option.
Your Option is in all respects limited and conditioned by the following
terms and conditions:
14. DEFINITIONS. In addition to definitions that may be contained elsewhere
herein, for purposes of this Agreement and the Option, the following
terms, when capitalized, shall have the following meanings:
(a) "AGREEMENT" means this written agreement evidencing the Option
granted hereunder which is signed by both the Company and
Optionee.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.
(d) "DISABILITY" means disability as defined in Section 22(e)(3)
of the Code.
(e) "FAIR MARKET VALUE" means, as of any given date, unless
otherwise determined by the Board in good faith, the closing
sales price of the Stock for that date as reported on the
NASDAQ SmallCap Market.
15. OPTION TERMS. You will be entitled to purchase up to 120,000 shares of
Stock on March 22, 2001, and an additional 120,000 shares on each of
March 22, 2002, March 22, 2003, March 22, 2004 and March 22, 2005, so
long as you are still serving as Chief Executive Officer of the Company
on such date. If you cease serving as Chief Executive Officer of the
Company, any nonvested portion of the Option is terminated immediately,
and any
vested portion is exercisable for thirty (30) days following the last
day on which you served as Chief Executive Officer of the Company or
until the expiration of the Option, whichever period is shorter.
16. TERM. This Option expires in its entirety on March 22, 2006. Subject to
the vesting schedule set forth in Section 2 hereof, the Option may be
exercised in whole or in part at any time during the term of the
Option.
17. EXERCISE. The Option may be exercised by delivery of the attached
Notice of Exercise to the Company. The exercise price may be paid in
cash, by certified check, or by transfer to the Company of shares of
Stock having a Fair Market Value, as of the date of exercise, not less
than the purchase price of the Stock being acquired pursuant to your
Option, or any combination thereof. The Company's obligation to deliver
shares upon the exercise of the Option will be subject to applicable
federal, state, and local tax withholding requirements. Unless
otherwise determined by the Board, withholding obligations may be
settled with Stock, including Stock received as part of the exercise
giving rise to the withholding requirement.
18. DEATH. If Optionee's service to the Company as Chief Executive Officer
of the Company terminates by reason of death, the Option held by
Optionee may thereafter be exercised by the legal representative of
Optionee's estate or by any person who acquires the Option by will or
the laws of descent and distribution for a period of one year from the
date of such death or until the expiration of the stated term of the
Option, whichever period is shorter. The Option shall be exercisable
only to the extent that the Option was exercisable as of the date of
death.
19. DISABILITY. If Optionee's service to the Company as Chief Executive
Officer of the Company terminates by reason of Disability, Optionee may
exercise such portion of the Option as was exercisable at the date of
termination for a period of one year from the date of termination or
until the expiration of the stated term of the Option, whichever period
is shorter. The Option shall be exercisable only to the extent that the
Option was exercisable as of the date termination.
20. NONTRANSFERABILITY. The Option is transferable only by will or the laws
of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act ("ERISA"), or the rules thereunder.
Except as permitted by the preceding sentence, neither the Option nor
any of the rights and privileges thereby conferred may be transferred,
assigned, pledged, or hypothecated in any way (whether by operation of
law or otherwise), and no such option, right, or privilege will be
subject to execution, attachment, or similar process. The Option may be
exercised during Optionee's lifetime only by Optionee or his or her
guardian or legal representative.
21. INVESTMENT INTENT. Unless a registration statement under the Securities
Act of 1933 (and applicable state securities laws) is in effect with
respect to Stock to be purchased pursuant to this Option, you agree
with, and represent to, the Company that you are acquiring the
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Option and Stock for the purpose of investment and with no present
intention to transfer, sell, or otherwise dispose of the Stock. In the
absence of such registration, no shares of Stock acquired pursuant to
the exercise, in whole or in part, of the Option may be transferred
unless, in the opinion of counsel to the Company, such transfer is in
compliance with applicable securities laws, and each certificate
representing any shares of Stock issued to Optionee hereunder will have
endorsed thereon an appropriate legend referring to the restrictions
against transfer. Prior to the transfer of any Stock to you, the
Company may require an opinion of counsel satisfactory to it that at
all times the Company will be in compliance with applicable federal and
state securities laws.
22. ADJUSTMENT IN CAPITALIZATION. In the event of any merger,
reorganization, consolidation, recapitalization, Stock dividend, Stock
split, or other change in corporate structure affecting the Stock, such
substitution or adjustment will be made in the number and option price
of shares purchasable hereunder, in the aggregate number of shares
reserved for issuance with respect to the Option, and in the number and
option price of shares subject to any outstanding portion of the Option
as may be determined to be appropriate by the Board to prevent dilution
or enlargement of Option rights granted hereunder, provided that the
number of shares subject to the Option will always be a whole number.
23. NONQUALIFIED OPTION. This Option is not intended to be an "incentive
stock option" as defined in the Code and is granted outside any stock
option plan adopted by the Company.
24. NONEXCLUSIVITY. The granting of the Option will not be construed as
limiting the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including the granting of other
stock options. Such arrangements may be either generally applicable or
applicable only in specific cases.
25. GOVERNING LAW. The Option and this Agreement will be governed by and
construed in accordance with the laws of the State of Minnesota without
regard to conflicts of laws principles, and all terms will be
interpreted and construed so that there will not be committed any
violation of applicable state or federal securities laws.
26. NO RIGHT TO SERVE. The granting of the Option does not grant Optionee
any right of service as a director, and the Company retains the right
to terminate service of Optionee as its Chief Executive Officer, or
otherwise, pursuant to Company's Articles of Incorporation, Bylaws and
applicable law.
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IN WITNESS WHEREOF, Company and Optionee have each executed this
Agreement effective as of the date first above written.
COMPANY: OPTIONEE:
GROW BIZ INTERNATIONAL, INC.
/s/ Xxxxxx X. Xxxxx /s/ Xxxx X. Xxxxxx
---------------------------------- ----------------------------------
By: Xxxxxx X. Xxxxx Xxxx X. Xxxxxx
Its: Vice Chairman
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NOTICE OF EXERCISE OF STOCK OPTION
AND RECORD OF STOCK TRANSFER
TO: Grow Biz International, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxx Xxxxxx, XX 00000-0000
I hereby exercise my stock option granted by Grow Biz International,
Inc. ("COMPANY"), effective March 22, 2000, subject to all terms and provisions
thereof and notify you of my desire to purchase ________ shares of Common Stock
of the Company ("SHARES"), offered to me pursuant to said Option. Enclosed is a
certified check in the sum of $________ or payment in such other form as the
Company has specified.
[THIS SECTION IS APPLICABLE IF THE SHARES ARE NOT REGISTERED UNDER THE
SECURITIES ACT OF 1933.] I hereby represent that the Shares are being acquired
by me as an investment and not with a view to, or for resale in connection with,
the distribution of any shares of the Company. I understand that the Shares are
not registered under the Securities Act of 1933, as amended ("ACT"), or
applicable state securities laws, that the Shares may not be sold or otherwise
transferred except pursuant to an effective registration statement under the Act
and said laws, unless the Company has received an opinion of counsel
satisfactory to it that such transfer or disposition does not require
registration under the Act or said laws and, for any sales under Rule 144 of the
Act, such evidence as it shall request for compliance with that rule or
applicable state securities laws. I further understand that the certificate
representing the Shares will contain a legend referring to such restrictions.
I acknowledge that I am responsible for payment of any taxes for which
I may become liable as a result of the exercise of this Option.
, /s/ Xxxx X. Xxxxxx
---------------------- ------ -----------------------------------------
Xxxx X. Xxxxxx
RECEIPT is hereby acknowledged of the delivery to me by Grow Biz
International, Inc. on _______________, _____ of stock certificate no. _________
for __________ shares of Common Stock purchased by me pursuant to the terms and
conditions of the option agreement referred to above.
/s/ Xxxx X. Xxxxxx
-----------------------------------------
Xxxx X. Xxxxxx
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